Underfunded pension plan

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Underfunded pension plan

A pension plan that has a negative surplus (i.e., liabilities exceed assets).
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Underfunded Pension Plan

A pension plan that has more liabilities than assets. That is, the retirees covered under the pension plan have been promised more than the plan contains. This may happen for a variety of reasons, such as the pension's investments not going as expected, or perhaps retirees are living longer than expected. It can lead to bankruptcy, though some pension plans have government guarantees.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
Huntsman Corporation announced it has entered into a definitive agreement to sell its chemical intermediates businesses, which includes PO/MTBE, and its surfactants businesses to Indorama Ventures in a transaction valued at $2.076 billion, comprising a cash purchase price of $2.0 billion plus the transfer of up to approximately $76 million in net underfunded pension and other post-employment benefit liabilities.
The last thought that I want to leave you with: can SMEs resolve the problem of underfunded pension funds?
3) It needs more cash for underfunded pension obligations
If I were to plead not guilty because I used the money to subsidize my underfunded pension, nobody in their right mind would expect the judge to say "Well, then you are free to go." But let the government take your money for the same purpose and AARP cheers.
Brown has criticized Raimondo's decision to overhaul the state's underfunded pension plans when she was treasurer in 2011, cutting pension payments to save billions, which angered some retirees.
Type of action: Legal malpractice Injuries alleged: Multi-million dollar ERISA liability for underfunded pension fund Name of case: Neal Cohen, Darren Chaffee, and SSL Assets, LLC v.
In the second case, the PGF initiates a termination of the underfunded pension fund for protecting pension beneficiaries, which is known as an involuntary termination in practice.
Senate Bill 1068 could eventually require up to 4 percent of all public workers' "employee contribution" of 6 percent of salary to be redirected from their individual pension accounts to help buttress the underfunded pension system, if public agencies' pension costs climb too high.
Bob Scott, a senior partner at LCP, said: "The collapse of BHS and the potential sale of Tata Steel UK, both with underfunded pension schemes, have highlighted the significance of pension liabilities and the impact that a large defined benefit scheme can have on a UK company.
Moreover, underfunded public pension plans have factored into resolutions of a number of recent, large municipal bankruptcies and it is likely that future municipal bankruptcies will also involve, in one way or another, underfunded pension plans." This language is a matter of concern.
According to the company, a portion of the proceeds of the term loan facility were used to prepay all of its outstanding loans under its existing credit agreement, to repurchase in a tender offer a portion of its 3.000% senior notes due 2016, to fund certain underfunded pension obligations as well as other general corporate purposes.